Model Plan Language for Public Schools - For use in drafting or amending a written program that reflects the 403(b) regulation’s requirements. May also be tailored for use by other types of eligible employers.

Establish annuity contracts or custodial accounts for plan participants
Individual accounts in a 403(b) plan can be any of the following:

An annuity contract, which is a contract provided through an insurance company;

A custodial account, which is an account invested in mutual funds; or

A retirement income account set up for church employees that can be invested in either annuities or mutual funds. 403(b) plans cannot be funded with life insurance (issued after September 24, 2007), endowment, health, accident or other types of insurance contracts. The employer, who is responsible for ensuring its plan complies with all legal requirements, should verify that there is no conflict between the terms of the 403(b) plan and the provisions of any annuity contract or custodial account agreement under the plan. The plan’s terms will overrule any inconsistencies.

Provide information to employees and meet other obligations403(b) plans that are not exempt from ERISA must also supply information to plan participants, including a Summary Plan Description, and must meet other fiduciary obligations.